LDF and Swiss-UK Tax Agreement
come received from a trust. Income up to GBP 9,440 is tax free in the tax year 2013/2014 for individ-
uals born after 1948.'” The UK tax system has four tax categories, as illustrated in table 2.
Table 2 Income tax rates
Name Income Tax rate on non Tax rate on Tax rate on
savings income savings dividends
Starting rate GBP 0 to GBP n/a 1096 n/a
2,790
Basic rate GBP 2,791 to 20% 20% 10%
GBP 32,010
Higher rate GBP 32,011 to 40% 40% 32.5%
GBP 150,000
Additional rate Above GBP 45% 45% 37.5%
150,000
Source: Her Majesty's Revenue and Customs [HMRC], 2013 (3).
The tax rate is selected after taking into account all applicable tax allowances and relief."
In general, foreign income of individuals resident in the UK is taxed as common UK income. The UK
has a wide network of double tax agreements in order to offset tax that is deemed paid in a foreign
country.”
Capital gains tax is a tax on profit from selling an asset. The capital gains tax rate is 18% for individu-
als whose income is taxed at the basic rate and 28% for individuals whose income is taxed at the high-
er rate. Additionally, there is an annual exemption amount of GBP 10,600 for individuals living in the
UK 140
“HMRC 2013 (3).
8 HMRC, 2013 (2).
'* Barthel, Neumayer & Busse, 2010, p. 366.
“0 HMRC, 2013 (6).
26